Most of revenue deficit carried over from previous years: Kerala Finance Minister

Thiruvananthapuram: Most of the state's revenue deficit has been carried over from previous years, Kerala Finance Minister Balagopal said on Friday while responding to the observations made by the Comptroller and Auditor General.

He added that the government will decide on follow-up actions to be taken regarding the observations after a detailed examination by assembly committees and other departments.

It is the constitutional responsibility of the Accountant General (AG) to carry out the audit of the state's finances and submit its observations, the minister said and rejected reports in certain quarters raising concerns about the government's failure to collect tax arrears, calling them baseless.

"As per the CAG report, in the financial year ended March 31, 2022, the total revenue deficit of the state is Rs 28,258.39 crore. This deficit has been carried over from departments like GST, KSEB, registration, and police for several years. Previous audit reports have clearly mentioned it," Balagopal said in a detailed statement.

The Compliance Audit Report of the Comptroller and Auditor General of India on the Revenue Sector for the year ended March 31, 2022 was tabled in the state assembly on Thursday. As per the report, for the 2020-21 financial year, Kerala's revenue deficit was Rs 21,798 crore and the same rose by Rs 6400 crore in 2021-22.

"The fact is that, unlike the previous reports, a new item has been added to the revenue deficit. That is, by calculating the accumulated interest on loans given to public sector undertakings like KSRTC, Housing Board, and Kerala Water Authority from 1970 onwards. This alone accounts for about Rs 5,980 crore," Balagopal said.

Justifying the measures taken by the government, the minister said there is a reduction of Rs 420 crore this year from last year's tax arrears that the tax department was supposed to collect.

"Usually the deficits in tax departments never come down but only increase. But this year, there is a reduction of Rs 420 crore in tax deficits compared to the tax deficits during the last financial year. This is a historical achievement," Balagopal said.

According to the CAG report, the tax deficit for 2021-22 is Rs 13,410.12 crore. Kerala could collect about Rs 258 crore of the total amount and around Rs 987 crore was further reduced through the disposal of appeals and amnesty, the minister said. Further, he said that Rs 12,900 crore out of the Rs 13,410 crore was assessed earlier as part of the laws that existed before the implementation of GST and Rs 5,200 crore pertained to money stuck due to different stay orders.

An amount of Rs 6,300 crore is part of various revenue recoveries. About the observations of the CAG on the social security pension issue, Balagopal said the mustering and life certificate production were temporarily stalled during COVID-19 period and some issues caused by this are now being resolved. "We could effectively eliminate (from the list of beneficiaries) the names of deceased persons and also duplicate entries, by connecting their identity cards with Aadhaar and through mustering till August 31, 2023," Balagopal said.

(With PTI inputs.)